Financing A Business : Rewiring Your Finance Alternatives

Looking For Someone To Tell You Where To Go .. For Canadian Business Financing ?

OVERVIEW – Information on financing a business in Canada. Small , new, and even established larger companies need to understand finance alternatives to propel their business forward towards more sales and profits

Financing a business in Canada sometimes requires that owners/financial mgrs be prepared for someone to... tell them where to go! In effect we're talking about ' rewiring ' your finance needs. Bottom line it's important to understand your finance alternatives, choosing the right one, or ones to propel your business. Let's dig in.

The landscape of Canadian business financing has changed dramatically in recent years - while many both popular and ' conventional' sources of capital are still available

(sometimes in' limited quantities’) there are in fact numerous ways to finance a business that we could call both creative, and simply speaking ' alternative ' We've maintained for years that in many cases ' alternative' is the new traditional!

Many businesses, (perhaps yours?) can actually support loans via assets and the ability to generate sales revenues but find themselves unable to meet bank criteria. There also are, of course, start ups and early stage firms that are just coming out of the gate - also challenged with financing.

Top experts tell us that in recent surveys over 60% of business owners plan to acquire new or additional assets to grow their business. In this case it makes a lot of sense to consider lease financing and/or term loans to acquire long term fixed assets or technology.

While Government touts helping business actual direct assistance is limited in nature - Our two recommended sources of funding for clients in this area is the Govt Guaranteed Small Business Loan ( it's not as small as you think ) , and the R&D SR&ED program - and by the way those SRED credits are financeable for cash flow purposes. While most people feel the govt is ' hard to deal with ' these two programs go against that grain and are in face accessible and used by probably over 10-11,000 businesses annually in Canada.

A lot of business liquidity comes from your firm’s progress in both selling and collecting. Therefore A/R financing is often at the top of list in a recommended solution in financing a business.

Whether your firms uses bank business lines of credit or popular non bank alternatives such as A/R financing (factoring). Our recommended solution in this area is CONFIDENTIAL RECEIVABLE FINANCING, giving you the ability to bill and collect your own receivables, and finance them as soon as you generate a sale. In that solution cheques from clients come to your company, not the finance firm! The ability to work with a legitimate and reputable commercial finance partner in this area is key.

A ' full blown' solution to the business line of credit is an ABL solution. That’s ' ASSET BASED LENDING ' - allowing you to combine your receivables, inventories and even fixed assets into one marginable revolving credit facility. It's more costly than bank financing of course but works and is used by thousands of firms - even large well known corporations who recognize the additional borrowing power.

If you're charged with financing your business and exploring the right finance alternatives seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
- get that help you need to ' rewire ' !


Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.

Info & Contact Details :

7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS FINANCING EXPERTISE



7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8


Direct Line = 416 319 5769

Office = 905 829 2653


Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing with the intelligent use of experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


Stan Prokop

Sources Of Finance For Businesses In Canada : Are You In Reverse Gear In Financing Your Business

Do You Really Know How To Finance Your Business?


OVERVIEW – Information on financing a business in Canada. What are sources of finance for businesses and how does the owner/manager access and choose those solutions

Financing a business in Canada can often leave the business owner/financial manager feel like they are operating in reverse gear .

The sources of finance for businesses don't have to seem unattainable if you've got some of the basics under your belt... along with some expert advice which never hurts. Let's dig in.

Timelines are not what you might be associating with your company's finance needs. However, the reality is that almost all the financing you require has some sort of timeline attached to it - typically short/ intermediate and long term. And in today’s relentless pace of business and technology the ability to adapt mid stream is quite often a necessity.

What then are some of the elements of understanding what financing you need and when. In our clients mind it's usually cost, and of course that's a factor. Some financing sources present a certain element of risk. Take for example Canadian chartered bank financing - low cost and plentiful if you qualify. Those qualifications often come with debt and liquidity ' covenants ' - Failing to meet those has the potential to put your entire business at risk.

Knowing what the big boys call your ' capital structure ' is important also. - that will affect the amount of debt you can take on. In some cases Canadian business owners and financial managers have found themselves in a position that their industry or the economy creates severe financing pressures - i.e. access to liquidity, etc.

Top experts seem to always agree that arranging financing in advance makes most sense - that sense of desperation never seems to impress the lender/banker/financier

In some cases refinancing your whole business with a focus to turning short term debt into long term might makes sense. Knowing you cash flow capabilities is key here.

What then are those business financing sources, and can we put some timelines on them?


SHORT TERM - typically one year in nature

A/R financing

Inventory finance

Bank lines of credit

Asset based non bank lines of credit

Purchase Order/Revenue Financing

Tax Credit Monetization

Bridge loans


INTERMEDIATE TERM - typically 3-5 years

Equipment financing

Working capital term loans


LONG TERM - 5-25 years?

Commercial mortgages

Mezzanine financing


If you want to reverse gear on financing a business properly seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can ' right track' you to sources of finance for businesses that make sense.




Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS FINANCING EXPERTISE






Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Financing A Business In Canada.Funding Questions And Oh Yes Answers

In Case You Didn’t Know Your 2 Cents plus our 2 Cents = Business Financing Solutions

OVERVIEW – Information on financing a business in Canada. Funding solutions for the Canadian owner/entrepreneur



Financing a business in Canada . We recently spoke about a BDC Canada CEO survey that we participated in around how Canadian business owners and financial managers felt these days about their ability to access capital.

That got us to thinking, since the survey posed a lot of questions and not that many answers. So it would seem that your 2 cents in questions plus our 2 cents in answers equals a solid 4 cents of Canadian financing solutions. (That would be about 3.5 cents U.S. with the way foreign exchange is working these days!) So let's dig in.

So let's look at some of those answers and questions posed hopefully add a strong sense of hope and solutions around key issues.

Canadian business owners/managers felt the 2 key issues around new financing typically tend to be the $ amount they are able to obtain and the rates and costs that are attached to that financing. We would point out that in the current environment business finance is accessed through traditional and also alternative capital. Each of those has a different cost. So while alternative financing going to be more expensive 99% of the time its also safe to say that it can deliver on more financing when amounts sought are not available from our banks, insurance companies, business credit unions, etc.

A good example? It the business revolving line of credit. Chartered banks offer business credit facilities at rates pretty well in the prime rate area these days. So your cost of capital is low - but approval or approved amounts are more difficult to access. So we encourage clients to weigh access to financing, not just the cost solution. Higher financing costs can be offset by increased growth and profits, as well as operating efficiencies.

Collateral was also a key issue

for Canadian business owners. As it is safe to say that all business financing worth its weight is 'SECURED' by a bank or commercial finance company your ability to negotiate the right collateral will play a key role in overall finance success. In some cases you may wish to use the services of a Canadian business financing advisor who is familiar with the lay of the land and has a reputation among lenders commensurate with your needs.

We were somewhat floored by the following comment in the BDC- ' Generally speaking participants in the survey were open to most of the elements that characterize equity financing except when it comes to dilution' . Is it just us but doesn't any sort of new equity dilute ownership?!! We're strong proponents of debt and asset monetization financing that generates capital and cash flow.

Are you using any of the following Canadian business finance solutions to generate funding and working capital without equity dilution?

A/R FINANCING

Equipment financing / Sale leasebacks

Bank commercial credit facilities

Non bank asset based revolving lines of credit

SRED Tax credit monetization

Bridge loans

Inventory financing outside of business credit lines

Securitization


While no firm would ever use all of the above solutions it's safe to say that any number of these could deliver capital and growth opportunities to your firm.

So when you combine 2 cents of Canadian business concerns with our 2 cents of solutions all of a sudden 4 cents (3.5 U.S.) doesn't seem that bad! Seek out and speak to a trusted, credible and experienced Canadian business financing advisorwho can assist you with your funding needs.





Stan Prokop - founder of 7 Park Avenue Financial

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS FUNDING SOLUTIONS


CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com

















Stan Prokop

Accessing Business Lending In Canada . Making The Right Financial Decisions When Financing A Business

Canadian Business Financing



Information on business lending in Canada . Financing A business comes down to why, how and where!



Financing a business in Canada. Decisions, decisions... decisions! It seems you always have unanswered questions - what type of business lending is best for my firm, what types of finances are available? ... who can we talk to .. and on it goes.

In fact the word ' debt ' keeps coming up when it comes to accessing financial solutions for your company... how much seems to ring a bell.

One of the things that business owners and financial managers often don't think about is the concept of ' fixed costs '. Those costs will always stay the same, no matter if your sales revenues and cash flows go up... or down. When times are great those costs stay the same and your company rises above the tide when it comes to profits, etc. However, if sales and cash flows decline your fixed costs unfortunately don’t fall in tandem.

It's all about leverage, and that becomes the double edged sword in business. That leverage that we associate with fixed costs and debt is risky but at the same time provides greater returns if your company is successful and growing.

We actually break leverage down into two different types - operating and financial. Financial is of course relating back to that debt and the amount we're willing to take on. Operating leverage on the other hand revolves around the amount of fixed costs you undertake.

No mater which type of leverage you’re talking about it always comes back to that balance act of how much is appropriate.

If you are not a public company it becomes a financial decision you make as to taking on debt ... unlike the public company you’re not in a position to go to the shareholders and ask for more equity . At the end of the day most Canadian business owners and financial managers borrow somewhere down the middle - by that we mean they don’t take on onerous debt, , yet they do take on some form and amount of debt .

One of the main decisions that business owners make around accessing business lending is the idea of making more return than the actual rates they are paying for debt. That becomes a challenge is your rates to finance are particularly high, which no doubt relates to your overall credit quality as perceived by lenders when financing a business in Canada. Your lenders, as we have pointed out in the past, DON'T share in the upside - they only want to cover off their risk and return. And if they have sufficient collateral or confidence in your cash flow all the better.

Canadian business owners benefit from leverage by accessing the right amount and type of financing. That includes equipment finances, term loans, bridge loans; asset based lending facilities, securitization facilities, etc. Speak to a trusted, credible and experienced Canadian business financing advisor on business lending in Canada, as it pertains to your firms needs.

7 PARK AVENUE FINANCIAL

CANADIAN BUSINESS FINANCING EXPERTISE



Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.webpage66.com/business_lending_financing_a_business_canada.html

Options on Financing a business via P O Financing and Inventory financing

It's a good news / bad news situation at its classic best. Your firm has the ability to receive orders or contracts but you are challenged with restrictions or unavailability of inventory and PO (purchase order) financing. Financing a business based on assets such as inventory and orders in coming has never been more of a challenge in Canada.

When we speak to clients we advise there is no one method that seems to handle all inventory and po finance challenges. But the good news is that via a variety of effective business financing tools you can employ you are in a position to generate working capital and cash flow from these two asset categories. Let’s examine some real world strategies that have made sense for clients.

The root of the problem is simply, you have orders and contracts, but those will potentially be lost to a competitor. Conventional wisdom is that you go to your bank and ask for financing to support inventory and purchase orders. As you may have experienced, we aren’t big believers in conventional wisdom on that matter!

However, utilizing a convention purchase order funding source does allow you to purchase product and get your suppliers paid, thus facilitating you ability to deliver to your customers.

One of the main benefits that many clients don’t realize is that inventory financing and P O financing don’t necessarily require your firm to have a long or strong credit history; the focus on structuring the transaction is around the inventory being financing and the general credit worthiness of your client, who will be paying yourself or the inventory or P O financing firm

The overall process is fairly simply and easy to understand when it comes to putting the transaction together successfully. On receipt of your confirmed purchase order your supplier is paid via cash or a letter of credit. Your firm of course completes final shipment of the product, which typically involves some additional time on your firms part. On shipment and of course payment from your customer the transaction is in effect settled. In a true pure po financing scenario the P O funder is paid immediately on your invoicing of the product. That is facilitated by your firm selling the receivable via a factoring type transaction as soon as you have generated the invoice.

There are always limitations to this type of financing - so things we look for early in the transaction are the ultimate remarket ability of your product in case there is a transaction risk. Naturally, as we stated, the overall credit worthiness of your customer is key, his receipt of goods and payment in effect closes the transaction.

Inventory financing and PO financing are generally more expensive than traditional financing, due mainly to the significant transaction risk that the lender takes. Therefore we strong recommend that your firm has solid gross margins in the 25% range to cover the associated costs of a po financing, inventory financing transaction that also factors in the time it takes to get paid by your client, as that typically adds 30-60 days on to the whole cycle of the transaction.

If there is one great tip of ' secret' that we share with clients its simply that the best method of ensuring financing in the manner we have outlined is to consider an asset based line of credit . Coupled with a facility that will finance your purchase orders this is the ultimate working capital tool that will allow you to grow business quickly and significantly. This type of facility is generally a non bank facility and is offered by independent finance firms.

Speak to a trusted , credible and experienced Canadian business financing advisor who will assist you putting together a working capital and cash flow solution that works!
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